Brazil Coffee Crop May Rise to Record 50 Million Bags

By Katia Cortes and Iuri Dantas
Bloomberg

January 6, 2010

Coffee output in Brazil, the world’s biggest producer, may rise to a record this year as trees enter the higher-yielding half of their two-year cycle, Agriculture Minister Reinhold Stephanes said.

Output will rise to between 48 million and 50 million bags in the coming April-to-September harvest, up from 39.5 million a year earlier, Stephanes said today in an interview in Brasilia. Output may top a record set in 2002, when Brazil produced 48.5 million 60-kilogram (132-pound) bags.

Above-average rainfall in Brazil’s southern region, where almost 80 percent of the country’s coffee is grown, will help increase production during the better half of the crop cycle, Stephanes said.

“Coffee output will benefit from rains,” Stephanes said. “Trees are loaded with beans, and we have the chance of reaching a new record.”

Brazil’s Conab crop-forecasting agency will release its first 2010 coffee output forecast tomorrow morning. Still, bean quality may suffer as rains make the trees flower unevenly and farmers take longer to harvest, Stephanes said.

Coffee futures for March delivery rose 0.4 percent to $1.4160 a pound on ICE Futures in New York.

Brazil’s National Agriculture Confederation, a lobbyist group for farmers, forecasts output of around 45 million bags as rain slows the harvest and damage beans, said Breno Mesquita, head of the group’s coffee department.

Stephanes also said Conab will increase its soybean and corn forecasts tomorrow on expectations that rains will boost yields. Conab on Dec. 8 said farmers will likely produce 64.6 million metric tons of soybeans and 50.2 million tons of corn.

To contact the reporter on this story: Katia Cortes in Brasilia at kcortes@bloomberg.net; Iuri Dantas in Brasilia at idantas@bloomberg.net